If deciding whether to eliminate a distribution channel, allocating corporate-sustaining costs to distribution channels ________.
A) helps define cost reduction possibilities
B) gives the misleading impression of potential cost savings
C) identifies administrative inefficiencies
D) evaluates the effectiveness of sales personnel

Question

Quizplus · Accepted Answer

Allocating corporate-sustaining costs to distribution channels can give a misleading impression of potential cost savings because these costs are not directly tied to specific channels and would not necessarily be eliminated if a channel were discontinued.

If Deciding Whether to Eliminate a Distribution Channel, Allocating Corporate-Sustaining